The definitive account of the financial meltdown of 2008–09 has not been
written, and cannot be just yet because the story is unfinished. A degree of
stability returned to financial markets this summer, but the system is still
stressed and nobody can be sure what will happen next. The broader economy shows
signs of recovery, but unemployment is high and likely to rise further, a
prospect with political and economic implications still unknown.
By the autumn of 2009, only a small part of the huge fiscal stimulus deployed
against the downturn in the U.S. had made itself felt. In monetary policy, the
Federal Reserve and its counterparts intervened to support the banking and
credit systems in new ways and on a wholly unprecedented scale. To call these
interventions “unfinished business” would be putting it mildly. Meanwhile, not
just the future is uncertain. The next surprise could change our understanding
of what has happened so far, as earlier shocks already have.
Never mind: A crop of new books on the subject has already come to market.
All were written under the pressure of short deadlines and fast-changing
circumstances — and, as you might expect, many were worthless on arrival. But
there are some splendid exceptions. The best books from this first crop are fine
by any standard.
Among the successful books, the range of explanations for the crisis is wide.
Some focus on economic policy, others on closely reported tales of greed and
fallibility. One locates the root cause in the triumph of finance over
manufacturing in the United States. Another asks whether capitalism itself
stands condemned. Just as the crisis had no single source, there is no single
way to best tell what happened. This makes it hard to say which book is best.
Nonetheless, if forced to choose just one, I would pick David Wessel’s In
Fed We Trust: Ben Bernanke’s War on the Panic — an excellent work on a
crucial aspect of the story, and one that addresses my professional interest in
economic policy.
-- Clive Crook in Winter 2009 issue of Strategy + Business
